Datasheet: Crypto, FTX, SBF, SEC, CFTC, Banking Regulators and the Influence Industry/Revolving Door

WASHINGTON, DC Dennis M. Kelleher, Co-Founder, President and CEO, made the following statement in connection with Better Markets’ release of a fact sheet on crypto, the collapse of FTX, the activities of SBF, the actions of the SEC, CFTC and the banking regulator on crypto and the crypto industry’s use of the revolving door in its influence campaign in Washington. On Thursday morning, the House Financial Services Committee will hold a hearing that is expected to address a number of these issues.

“As policymakers continue to scrutinize the crypto landscape, including the actions of FTX and SBF, it is critical to understand and consider actual facts rather than self-serving spins, unsubstantiated claims, bought advocacy, overblown hype and harmful PR. First and foremost, the current laws and rules are clear and more than sufficient to address almost all lawlessness in crypto. The fundamental problem is that the crypto industry refuses to comply with these securities and commodities laws (which exist to protect investors, customers and financial stability) and therefore the vast majority of crypto products are unregistered securities and commodities illegally traded on unregistered be traded exchange. It’s not that crypto can’t comply with the law; it is that they will not do it for the sake of profit maximization.

“Second, the FTX and SBF influence campaign was comprehensive, coordinated, and strategic, fueled by $100 million in campaign donations, millions more to an army of lobbyists, and widespread use of the revolving door, particularly the hiring of at least 13 former CFTC officials. And they almost got away with it. This was facilitated by the CFTC chairman becoming the SBF’s “key” regulatory and legislative ally, and the CFTC’s failure to thoroughly examine FTX’s predatory proposal to radically change the structure and operations of systemically important commodity clearinghouses and to evaluate. There were many red flags, and the behavior that missed them should be thoroughly examined and investigated.

“Third, banking agency and SEC regulators have withstood tremendous political and industry pressure to deny crypto access to and ties with the core of the financial and banking system. That’s the only reason the ongoing crypto carnage hasn’t turned into a financial crisis, crash, and bailouts, which happened with subprime mortgages in the early 2000s and led directly to the 2008 crash. The industry should not now receive a legitimizing legislative bailout that puts taxpayers and financial stability at risk. Instead, policymakers should allocate resources to the SEC and banking regulators so they can more effectively combat a dangerous, lawless industry that is pursuing a scorched-earth litigation strategy.”

You can find these and many other facts here in our fact sheet.

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Better Markets is a nonprofit, nonpartisan, and independent organization formed in the wake of the 2008 financial crisis to advance public interest in financial markets, support Wall Street financial reform, and make our financial system workable for all Americans to do again. Better Markets works with allies – including many in the financial community – to promote pro-market, pro-business, and pro-growth policies that help build a stronger, more secure financial system that protects and nurtures Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org